Short answer. The client becomes responsible. Article 106 of the Labor Code treats a labor-only contractor as merely an agent of the employer, so once your agency is found to be one, the client you actually worked for is responsible to you in the same manner and to the same extent as if it had hired you directly.
What the law says
There is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer.
Labor Code, Article 106 — Contractor Or Subcontractor. Read the full provision →
What the law says
In such cases, the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him.
Labor Code, Article 106 — Contractor Or Subcontractor. Read the full provision →
What makes an agency a labor-only contractor
Article 106 spells out the test: there is "labor-only" contracting where the person supplying workers to an employer does not have substantial capital or investment in the form of tools, equipment, machineries, work premises, among others, and the workers recruited and placed by such person are performing activities which are directly related to the principal business of such employer. In plain terms, an agency that has no real capital of its own and simply supplies you to do work that is core to the client's business, rather than genuinely running an independent operation, fits this description.
What follows once that finding is made
The consequence is direct: the person or intermediary shall be considered merely as an agent of the employer who shall be responsible to the workers in the same manner and extent as if the latter were directly employed by him. The law does not treat the agency as your true employer in that situation. It treats the client — the business that actually used your work — as standing in the employer's shoes, carrying the same responsibility toward you as it would toward someone on its own payroll.
A separate rule protects unpaid wages either way
Article 106 also has a wage-specific safety net that applies even outside a labor-only finding: if a contractor fails to pay wages properly, the employer that engaged the contractor is jointly and severally liable with it, to the extent of the work performed under the contract, in the same manner it would be liable to its own direct employees. So while a labor-only finding shifts who is treated as your employer for all purposes, the client can already be pursued for unpaid wages on this separate ground, whether or not the contracting arrangement is ultimately labeled labor-only.
What matters if you are trying to establish this
The Article 106 test turns on facts you likely already have some evidence of: whether the agency owned the tools, equipment or premises you used, or whether the client supplied them; whether the work you did was directly tied to the client's own business rather than incidental to it; and who actually directed how you did your job day to day. Keep anything documenting where your equipment and instructions came from, and bring it, together with your contract with the agency, to a lawyer who can weigh it against this test.